How to Refinance a Car Loan With Bad Credit

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Comparison shopping is the best way for people with bad credit to refinance their loans, however it might be worth waiting to build up your credit before refinancing—otherwise you could be stuck with high interest rates.
Car insurance comparison and broker app Jerry has compiled some helpful information about setting yourself up for success if you want to refinance a car loan with a less-than-perfect credit score.
If you’re looking to refinance your vehicle, Jerry can help. Jerry compares quotes from multiple lenders to make sure you’re never overpaying for your loan.
Read on to find out more about refinancing your vehicle with bad credit.

Can you refinance a loan with bad credit?

Nothing is stopping you from refinancing your car loan, even if you have bad credit. But there are also no guarantees that it will work.
One of the tricky things about refinancing with bad credit is that bad credit generally translates to higher interest rates. Even if you get lower monthly payments, you’ll usually end up paying a lot more in the long term.
That said, if average interest rates for car loans have dropped, it might be possible for you to get a better deal—especially if your credit score has improved.
The good news is that there are lenders that specialize in refinancing loans for people with bad credit. If you feel stuck with a car loan that you don’t love, exploring the option of refinancing could be worth a shot.
Key Takeaway It’s possible to refinance a loan with bad credit, but you may have to agree to less favorable terms to lower your monthly payments.

Track your credit score

Look into your credit score before you apply. Each application will result in a ding on your credit report for a hard inquiry. Knowing where you stand will help you target lenders that are less likely to turn you down.
You can access a free credit report from each of the three major credit bureaus once a year. You can also use apps like Credit Karma to help you regularly track and improve your score.
Be sure to check the reports for accuracy. Disputing inaccuracies is an easy way to improve your credit standing before you try to qualify for refinancing.

What credit scores do I need to refinance my auto loan?

The required credit score depends on the lender. There is no universal minimum credit score to apply for a car loan.
Lenders are generally more likely to turn down people with bad credit.
Some companies specialize in refinancing loans for people with bad credit, including bankruptcies and repossessions. Keep in mind that you might get stuck with less favorable terms unless your credit score has improved since you took out the original loan.
Key Takeaway The lender decides whether or not to accept a borrower with bad credit. Knowing your credit score will help you choose a lender who is more likely to refinance your loan.

Talk to your lender

Sometimes lenders will refinance their own loans.
If auto interest rates have dropped or you have better credit since you took out your loan, refinancing might be a better option. It doesn’t hurt to reach out to your lender to see if they’ll consider it—just be sure to keep up with your payments beforehand!
If your lender is willing to look into refinancing, make sure you’re ready to shop around before you apply. They will need to make a hard inquiry to check your credit rating. You’ll get a grace period of about 14 days to shop around without collecting multiple dings on your report.
Key Takeaway Consider asking your original lender to refinance your loan if your credit score has improved or auto interest rates have dropped.

Compare your options

Shopping around is always a good idea, even if your current lender will refinance your loan.
You deserve a loan package that works for your budget and the confidence that you’re getting the best deal on your auto loan refinance.
There’s just one way to get both: Jerry. This intelligent, AI-based app is the fastest, most accurate way to comparison shop for loan options—and you won’t have to spend loads of time making calls. (And bonus—finding and comparing quotes is free!)
Key Takeaway Comparing offers will help you land the best long-term outcome. Using Jerry’s car loan comparison tool can help you afford your monthly payments to get better terms when you refinance.

Best lenders for bad credit

If you want to refinance your car loan with bad credit, these lenders are a good place to start.

New Roads

New Roads is known to help people with blights like bankruptcy, repossessions, or charge-offs on their reports to refinance their loans.
You can be upside down to qualify, but your current loan balance can’t be more than 120% of the wholesale value of your car. You will need to have made at least 12 monthly payments on your current loan to be eligible.

Auto Credit Express

Using Auto Credit Express to shop for refinancing options can help make your job a lot easier—if you meet the qualifications.
Auto Credit Express is not actually a lender. It’s a lending platform that will help connect you with a lender that will refinance your loan with bad credit.
You’ll need to meet certain minimum requirements to use the platform. If you’re upside down on your car loan, have fallen behind on your payments, or your credit scores have dropped since you applied for the original loan, you will have to look elsewhere.


Tresl can help you save time and minimize unnecessary hard credit inquiries. It will use your information to determine if you will prequalify for refinancing with any lenders in its network.
Pre-qualification doesn’t mean that you will be accepted, and you’ll still have to formally apply to refinance. If you are accepted, make sure that the rate and terms are acceptable. The final offers may differ from the original estimates.

The takeaway

Even if you have bad credit, you might be able to find a lender willing to refinance your loan. Even so, it can be difficult to find better loan terms that don’t end up costing you more in the long run.
If you’re having trouble making your monthly loan payments, saving on insurance with Jerry is always a good place to start. The average Jerry user saves $879 a year on car insurance premiums.
It’s this simple: download the Jerry app or go to As a licensed broker, Jerry does all the hard work of finding the cheapest quotes from name-brand insurance companies and completing your purchase. Jerry will even cancel your old policy for you.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store, making it the top insurance app in the country.
“WHERE HAS JERRY BEEN ALL OF MY LIFE? They cut my bill down to less than half of what I was paying before! They do EVERYTHING for you after only a few questions from you—all on the app. Thank you Jerry!” — Satisfied Jerry customer

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